Thanks for joining us for this weekly joint meeting of the Mayor and Denver City Council.

Follow along as the mayor and city council members hear updates from city agencies and projects, discuss important city matters, and hear about what's happening across the Mile High City.

Join the discussion with your elected officials starting now, and we're going to be a community.

Good morning, everybody.

Welcome, good to see you.

Thank you for joining us at Mayor Council.

Happy Tuesday.

Happy to be here, Mayor.

Paul Cashman, South Denver District 6 in the Haas.

Good morning, Amanda Sawyer District 5.

Good morning, Diana Romero Campbell, Southeast Denver District 4.

Good morning, Darrell Watson.

Fine, District 9.

Good morning, Kevin Flynn, Southwest Denver's District 2.

If anyone sees a screw banana, 25.

Council Pro Tem lost a banana.

Literally dropping banana peels.

Great.

Councilman of Vidros, you want to do a quick intro?

Uh lucky district seven.

I did not mind a banana.

Okay.

Great.

Um, thank you all so much for being here.

I want to open up to announcements.

Many members have announcements they want to make for the public at large listing at home or for other council members that are here.

Thank you.

Um, I so tomorrow will be uh my 21st wedding anniversary with 25 years.

Um, and so I just want to um say happy anniversary and thank you for everything that he does um for our family.

And so, yeah, that's it.

Any others, can you top that?

Councilman Flynn.

Well, I'll try.

Uh I was wondering if I would say this.

My late older brother passed away about two years ago.

He was a very well-known science fiction author.

His 17th novel was published posthumously.

And where we found out that uh he is getting an award from science fiction group, uh, his third over a 40-year writing career.

Uh, the Prometheus Award from the Libertarian Future Society.

And I'm gonna give the acceptance speech by Zoom uh later this month.

We're just really proud of my big brother and all that he did with his life to be so well known and so well regarded.

Uh with the books that he wrote.

Congratulations.

Well, I don't know about Ray.

The Libertarians loves Council President Proteman.

Thank you, Mr.

Mayor.

I wanted to remind people that this Saturday, August 16th at Bible Park, we are gonna have a free symphony in the park evening.

It starts off at four o'clock.

The Thomas Jefferson Orchestra is gonna be the opening act.

We also are gonna do a park dedication for the new art that is uh coming to Bible Park and the symphony should start around five.

There will be food trucks and um and tables and uh tables from our partner um agencies out there, but it's just gonna be a nice evening.

We're not expecting rain.

I've been told to tell people to bring blankets and low chairs um to sit on so that you know they're nice and comfortable, bring a picnic.

Um parking's limited, so you know, if you can ride, walk, roll um to the park, and we look forward to seeing everyone there.

It's gonna be great.

Great, thank you so much.

Um other announcements.

Council President.

We have our movie in the park at Zunite Park this Friday.

It's a resource fair as well.

So we'd love to see you on 51st and um Junai.

Uh we'll be great.

And then this Wednesday, we're ending our yoga at Elich's on the 38th in Tennyson.

So just bring your yoga mat and a calm state of mind.

I think we have 70 people registered, which is I know like couldn't we love to get like our no, like all these things with 70 people?

Like, I'm not not to be read, but I'm gonna just call it up there.

I think that it's these type of things draw our community, and um, so we're building a great and just want to give a shout out to my staff um who has been working really hard to.

I mean, I met people at these this yoga that I didn't even know existed in my community, and I've lived there my whole life.

So and it's all free.

We just partner with our yoga um instructors in the neighborhood, and it it's cross-advertising for them.

Um, and it's free for us, and it's just an hour, and we do really basic, free, easy yoga.

So, and I think we need that in our world right now to breathe a little bit and just take a minute.

Yeah, thank you.

Thank you, Mr.

Mayor.

And just to answer all the questions that have been coming in since last week, to be clear, this will not be the movie about the dying dog.

No.

No, okay.

Councilman Watson.

Uh no dying dogs.

Um, I think we might need some yoga here.

So you bring it to uh city council.

I I wanted to share next Monday from 1030 to 11:30.

Uh, each month, uh, District 9, we have a community meeting where we invite all community members, uh, especially folks in District 9, but even if you're not, come on down to um Rivers and Roads um at 2539 Bruce Randall Avenue from 10:30 to 11:30.

It's our monthly community office hours.

Look forward to hearing your input.

And I want to share a personal thing.

Uh, my husband is the quiet, handsome, smart part of the family.

He stays away from all of this craziness uh that I made of our lives with this city council uh role.

And uh he attended uh city council meeting last night.

And he he sat in a crowd through all of it.

So I wanted to say thank you to my uh husband for being so amazing and sticking with me uh through all of this stuff, and then also our um well, a best friend's uh daughter.

She is um here staying with us for about a week.

She's doing um political work in Chicago and wanted to see uh the big bad folks here in Denver, how we roll.

And uh so Gabby and your partner Bennett, thanks for coming last night and also uh watching uh how Denver City Council uh engages.

So thank you so much, Mr.

Mayor.

We will look forward to them planning to move to Denver.

They've been here in real life.

Yes, uh great.

Any other announcements?

Uh okay, great.

Um, we do have just one topic this morning on our general session, which is a uh important topic.

Want to do updates from the council president's request on both uh budget and personnel and uh as the city's makes steps towards trying to get balanced budget over this next few weeks.

Uh I want to say a couple of words of opening, then I'll bring up our great team from finance to talk through.

We both have our team from finance as well as from HR to walk you through updates that we have.

Um I know the other council members know this, but obviously uh you sign up for this job for a lot of reasons, mostly because you care about your city and you want to make it better, and you're excited to work with amazing people who also want to make it better.

Um, and every day you come in and get to work with those folks, and you see them everywhere, whether they are picking up your trash on a Wednesday morning when you're still getting out of bed, or whether they are keeping your parks clean at night, or whether they are getting your DMV license fixed, or whether they're helping you find a job because you need to get one because you don't have one right now.

Like those are all incredible services that our city provides.

Um we have the unfortunate position of not being like the federal government where you can just print money if you need more of it.

You just have the dollars that you have that come in the door, and like every family, we have to make that budget work.

Um this has been the hardest leadership task I've probably ever had to undertake over the last four months is how do you find a way to take uh amazing work the city's doing and make it operate on fewer dollars than you have available.

And I just say at every turn, what we've done is tried to avoid in every situation having an impact on uh city residents and on our city employees.

And so our cabinet members have done incredible work, it's not done to figure out how they can do every single thing to get more out of the dollars that we have.

Um, and in every moment they're showing up trying to fight to protect uh city employees and minimize the impact on them.

And so this is something that no one wanted or asked for or enjoyed.

Uh, we think it's our obligation to make sure we deliver to you our proposed balanced budget, uh, but this one has been the hardest one that we've done, and there's no denying that, there's no changing that.

Um, and we will do everything we can to make sure we treat every single one of our team with the dignity they deserve, but just name this has been a hard season, and it will be a hard few weeks before we're we get past it.

Um, but I continue to be grateful and amazed by how committed every one of our city employees remain in the months of hard times.

So I just wanted to say that very personal for me update on what this involves.

Um, even though we go into much larger city systems, we know this is all fundamentally about people.

It's about people with families and people with commitments and people who've chosen to give their life to the city rather than do something else.

Uh and we are deeply grateful for that, even in the hardest of times.

So I just wanted to name um that hard truth about where we are and how we're trying to get the city to a place where it will be fiscally stable enough that everyone can take a breath and have some certainty about where we're heading, which is what we'd like to do in this budget cycle.

Sometimes that requires hard decisions.

Um, so I want to update you on where we are on both the financial projections on the fiscal state of the city, on uh proposals around layoffs and information to employees will be coming in the weeks ahead, uh, and give you both an overview from our budget team and from our HR team on what that support and structure looks like to be able to answer any questions you might have.

I'll say in advance, um we don't have and won't be able to share yet the total number of layoffs or the people impacted or the departments impacted.

That's not data that is complete yet, and that is most importantly information that we wouldn't share with anyone before we share with the individuals themselves and the departments themselves who are most entitled to know that.

As soon as we know and they know, of course, we will make sure that you all know and the public knows.

Um, but that's not information we have today.

We do have information about uh the city's fiscal standing and the process and systems we put in place around how to support employees if they are affected, and want to walk you through both of those.

Um with that, I will bring up our wonderful budget team who is here and our HR team who are here.

You all can come up to the table and we will jump in.

Justin, are you kicking us off?

I think I am kicking us off.

Um to the next slide.

Um morning, everybody.

Justin Sykes at three serving as the city's budget and management director.

I'm joined by Stephanie Adams, our deputy chief financial officer, as well as Lisa Martinez Templeton, uh, who is on standby for any tough economic questions that you all might have.

I'm gonna start by giving a brief economic update and an update on our revenue forecast for the general fund in 2025 and then 2026.

I'll turn it over to my colleague Heather from the Office of Human Resources to speak more to the layoff criteria and process that we will be embarking on soon.

Uh, if we go to the first slide in kind of the content of the deck, um the current economic outlook is about the same as what it was a few months ago, uh, but slightly worse.

And so I think what we continue to anticipate is a market slowing in economic growth.

There is heightened uncertainty driven by trade tensions and tariffs.

And then overall, that means that there is a greater risk of inflation, and the economy here in Denver and nationally is more susceptible to other shocks.

And so we just have less cushion, less resilience.

Uh, if oil prices were to increase or there were to be some geopolitical conflict.

On the next slide, uh, want to spend a few minutes talking about tariffs.

That's something you've heard a lot about in the news recently.

Back in April, the president announced sweeping tariffs that were first on and then off, and now we're back on again.

And a tariff really is just a tax on imports.

And so 20% tariff, for example, would mean that there is a 20% surcharge on something that we're buying from abroad and then bringing into the United States.

And right now, the effective tariff rate in the United States is about 20%.

That is up from about 3% as recently as December of last year.

And the effective tariff rate is really just the average rate across all imports.

For the United States economy as a whole, imports account for about 14% of the gross domestic product.

Here in Denver, it's a slightly lower share, about 10%.

And because of these higher tariffs, which are going to cause higher prices, reduced spending by consumers and businesses, more uncertainty.

What we expect, what Lisa has modeled is that our 2026 sales and use tax revenues for Denver are going to be down by about 25 million dollars relative to what they otherwise would have been.

And so with that in mind, maybe we can jump to the next.

Can I pause for one second, Justin?

I just think this is worth us talking about for a minute for the folks listening at home, because I know this is thrown around the media a lot.

People are have busy lives and it's hard to pay attention to it.

If we look at what this means, every member of this council, I think ran for office and has spent their time in leadership here trying to reduce costs for Denverites, right?

You hear all the time how Denver's getting more and more expensive, and we are fighting very hard to reduce costs.

What we're talking about directly here is that seven or eight times a day, every single thing that Denver does is go up by about 20%.

So if you were to stop to get coffee in the morning, it'll go up by 20%.

If you have to buy shoes for your kids to go back to school will go up by 20%.

If you're gonna buy a refrigerator because yours is broken, if you need to buy a new car, uh if you are going to the restaurant, any restaurant anywhere.

I talked to a restaurant owner, one of our iconic restaurants who may close, uh, because she said just the cost of liquor went up 20%.

And I said, wait, but you're buying American liquors, that doesn't matter.

That liquor comes in a bottle made out of glass and steel, and both of those go up 20%.

That will be enough to put her restaurant under.

And it certainly means every drink you buy when you take your kid to the restaurant goes up 20%.

And so, and the result of that is what's going to happen is folks are going to be stressed and strained to spend more that they can afford, and then they're gonna just stop spending.

So the reason why this revenue goes down in 26 is after you go back to the restaurant, and it used to be $30 to take your family out for dinner, and now it's $36 or $40, you just don't go out again.

Um, and then that means you don't drive sales tax, you don't spend money at that restaurant, we don't have servers that are employed, we don't have retail that is employed.

And so what you see as drop in revenue is people quite literally breaking from saying the cost is now too high, I will not buy my killer new pair of shoes.

Um, and so I just want to name that, which is and also name for people following at home.

The net result of that is gonna be that is about 30 billion dollars more a month that will be written to the federal government uh for those tariffs.

So the federal government will pick up 30 billion dollars a month of new revenue that they will use mostly to fund tax breaks to the wealthiest one to 10% of Americans, uh, while all of our residents pay those costs.

Um I just want to name what is happening here so people aren't surprised when they say, why does it feel like things are all getting more expensive?

That is not the efforts of this council or the city is actually the opposite of our efforts, but that is something that's gonna be very, very hard for us to stop.

And when you see it actually affecting sales tax, that means behavior is changing because people are stopping to go out or to purchase, and that's very concerning.

Go ahead.

Um we jump to the next slide.

This is a look at core sales and use tax.

Uh sales and use tax revenues are the single largest source of the general funds revenues.

They account for well over 50% of general fund revenues.

And over the last year, as you can see, uh growth has slowed measurably.

Uh last week we just got data on June sales tax activity, uh, which was collected in July and then reported in that first week of August.

And what we saw was that June activity was down by about 0.4% compared to 2024 June sales tax activity.

Uh so that equates to a few hundred thousand dollars off of about a 76 million dollar uh amount of sales and use tax revenues for last year in June.

And so I think we were just under that 76 million uh in in June of this year.

If you look back going to January, there have been a couple of months where we were up slightly year over year in 2025 compared to 2024.

We were up six percent.

However, uh we believe that a lot of that growth for January was due to one time items that are not likely to be recurring.

Well, we also see in some of the data are that consumers have front loaded some of their purchases, and so I think the concern is that uh people understanding that tariffs were likely to go up things earlier than they were otherwise planning to do.

And so then that resulted in the buying things uh today or or a few months ago, but may result in them not buying those things and the city and county of Denver not bringing in that sales and use tax revenues going forward.

And so uh overall for 2025's budget, we had been projecting uh as part of the budget process a slight couple percent growth in sales and use tax.

We are revising that down, and so when we come out with the 2026 budget book here in a little over a month, you will see that uh for the current year or sales and use tax revenues in 2025, we project to be one to two percent lower than they were last year, uh, which was very concerning, um, and for all the reasons that the mayor just spoke to me.

Uh going on to the next slide.

This is a snapshot of the overall general fund revenue growth, so not just that 55 or 56 percent that are driven by sales and use tax, but all revenue sources, including property taxes, permitting uh revenues, parks and rec revenue, all of the different things that bring in revenue to the city, and you can see that for 2025, our current revision is that we're gonna essentially be flat, about 0.3% growth, and then for 2026, we believe that our general fund revenues are going to be less next year than we're projecting them to be this year.

I think you have a question for Councilman Sawyer.

Yeah, thanks, Justin.

Thanks, Mr.

Mayor.

Before we move on, I just want to ask about the revised and projected numbers.

So I certainly understand how we got there, right?

But I'm curious why um 0.3%.

Like why would we not just estimate at flat, kind of knowing that we know what we know for 2026?

Why bother with 0.3%?

Why why not just say zero?

Uh great question.

So I think what what we're doing on a monthly basis is revisiting what our revenue forecasts are, and and we try to be as accurate as possible.

Um, but I think inevitably any projection that you give to that degree of precision is going to be wrong.

Um, but that's that's what we're aiming for.

And so we're we're trying to um as precisely as possible project what it will actually be.

Um, and so I think that's why it's not zero is because we do think the actual revenue growth relative to last year uh will be about 0.3 percent.

Um, but you raise it for a point, and don't want to create a false uh sense of the precision that we're able to get to.

Yeah, I really appreciate that.

I I think the reason I'm asking the question is because that 0.3% translates to jobs, right?

The estimate of 0.3% versus zero translates to potential jobs that we are saving because there's a difference between zero and point three percent.

So I think it's important to flag that like while we are attempting to be um careful in our estimates, we are also being as accurate as possible to ensure that as many jobs as possible can be saved during the layoffs based on this.

And I think this this revenue growth that you're seeing um in a few slides we'll talk about that 200 million dollar gap.

That that's built into the 200 million dollar gap.

And so that there um is is very minimal economic growth, it's a lot slower than what we've historically seen.

Um, and so that that is our best estimate.

We will know uh March or April of next year, kind of where we actually land.

And we are councilman Sawyer uh for 26 projecting at zero percent.

So 26 budget is based on zero, right?

So we have zero percent growth expectation.

Um we thought that was appropriately cautious, as you can see here.

This projection even has that that revenue going negative.

That would be below zero, which would be uh concerning.

But I think we're we're both trying to prepare for worst-case scenarios, so we don't need to come back in six or nine months and say, hold on, we have another gap.

Uh and and you're right, and yet not overcorrect.

But I think the these projections show we're probably right to be focused at zero as the number.

Great, thank you.

Yeah, good question.

Mr.

Mayor, I don't want to spend too much time.

Oh, I apologize.

I have uh councilwoman Gonzales Pacheras, then Watson, then Alvidris.

Um yeah, I was just curious since we're talking about um you know the economic growth and then growth.

I was wondering if the city economists, I I you you said Lisa Martinez Templeton was here.

Oh, there she is.

Hi.

Um, do you mind?

I have I have a quick question, and I don't know if it's getting a little bit out of head because it sounds like we're going to be talking about the shortfall, but I'm curious if there are any updates to um I you know we see this kind of update, but I'm just curious since the last time we received information about the shortfall, if there have been any updates to the revenue predictions and kind of hearing what what Justin is saying, I'm curious as you and your role as the city economists, if you have any additional thoughts on that on the revenue growth projections or the revenue growth projections and also like what then that means for the the shortfall.

Um I can certainly speak to at least the sales and use tax.

So I am responsible for forecasting all of those revenue streams.

And um, those have been incorporated into this latest.

I just pulled them down actually uh mid-July.

So as soon as we had our latest June numbers, I pulled down, extracted all the data and reforecasted everything.

And so that has been incorporated into what they are now presenting for the 2026 projection.

Um, and then I think you know, just basically it's as Justin spoke to, right?

We are still anticipating growth, it's just heavily slowed.

And where we were hoping to have some quicker recovery, it's just sort of been pushed back a little bit.

Thank you.

And just to clarify, she obviously is the resident genius.

We're grateful for all of your amazing work on revenue projections.

That would only be one side of the ledger.

All of our budget team then manages what are the costs that we have.

Those revenues against the costs are what create the gap.

But I think your your projections on these potential slowings are what continue to add caution for us around the concerns.

Umatson.

Very quick question, you don't have to dive too deep for the for the team.

I'm very curious if we have an overlay of state and federal uh growth rates.

So as we're looking at revenue growth that is flattened, it will be helpful, at least to me, I don't know if anyone else, to demonstrate really where it's a variance between our growth or stagnation compared to state and federal, it's just helpful for me and when I'm communicating to folks.

So you don't have to dig into any of those numbers, but would love to see if if we have some kind of mapping of that as well.

Thank you, Mr.

Mayor.

Councilman Vidros.

Thank you.

Um I'm a little bit confused about the figures as far as are we using the actual revenue that the city earned?

Because when I look at the actual revenue that the city earned, it shows it should be actually lower for 2023 and higher for 2024.

So what we're uh using for 2025 is our current estimate for the entire year.

I'm asking about 24 and 23.

Um these numbers are growth over the previous year's revenue.

And they're actual revenue.

Yes, they are actually actual revenue for the general fund.

I'll have to send you the numbers that I have because they're just not I think you're looking at the ACFR, and it also does include other funds besides the general funds.

If you send those over to us, we're happy to dive into that.

It might be some other revenues on top of the general fund revenues.

Okay.

Sure.

Uh okay, I think we're back to you, Justin.

Um, so I think if we jump to the next slide here, um, don't want to spend much time on this slide or the next slide.

The mayor back in May spoke extensively to the growth that we've seen, both in services and supplies expenditures on this slide as well as on the next slide in the personnel growth that the city has witnessed over the last uh 15 or so years.

Uh if you uh compare that to the population growth, I think our population here in Denver has only grown by about 14 or 15 percent.

Uh and so this is part of the story as to how we got to where we are today.

Um, on the next slide, uh just as a reminder, something else that the mayor has spoken to.

Um, if we go to the the gap between uh revenues and expenditures, uh what we had shared a few months ago was that between the baseline 2026 expenditures and the amount of revenue that we are projecting the general fund will bring in for 2026, that gap is around 200 million dollars.

I think what's what's really important to flag here is that if we were to spend at that level, that would mean dipping into our fund balance or our general fund reserves or our savings account uh by 200 million dollars.

That that would be how much our costs exceeded what we were bringing in.

And as of the end of 2024, our general fund reserves stood at 239 million dollars.

And so if we were to spend at that level, it would wipe out the reserves that we have today.

So what that means is that in 2026, we need to bring spending in line with revenues so that we are not continuing to dip into fund balance.

Thanks.

Thanks, Justin.

So our fiscal rules, which anyone watching at home can see in the budget book.

Um, I think it's like page 67 that it starts on.

I know.

I'm such a nerd.

It might be six.

There's another section on like 92 where it also is restated.

Sorry, people, I'm a giant policies.

Okay, so what our fiscal rules say is um our goal is a 15% fund balance between 10 and 15 percent.

There are strategies that we are required to employ to ensure that we get back up to 15 percent.

Um, and then below 10%, there are significant strategies that have that are required to be employed to ensure that we never go below 10%.

The city has never been below 10%.

Um, where are we estimating that we are going to end 2025 in our fund balance?

What percentage?

Um uh based on kind of the current forecast for our 2025 revenues being about 50 million dollars lower, and then assuming that we take the steps that the mayor articulated back in May.

So um the furloughs, which will save us about 10 million dollars, the hiring freeze, which we believe will save us five to ten million dollars, and then preserving as much general fund contingency as we can.

Uh, we believe we can offset most of that decline in revenues.

And so, assuming we're able to do that, we will end somewhere between the 10 and 11 percent of fund balance.

Okay, so follow-up question for you.

Then I really appreciate that.

I am that's very concerning to me that we're at 11% between 10 and 11 percent.

So when we see the 2026 budget, um where are we going with refilling our fund balance?

Because that is not going to happen in 2026 based on these numbers.

That is going to have to move be uh a longer term strategy to refill up to 15 percent.

So what is our plan for that?

So I think what I can say right now is that we in our in our budget for 2026, we will not dip further into fund balance.

Okay.

I don't believe there's any scenario where we get back up to that 15 percent.

No, no, there's not.

So I think uh what you will see is that we are not dipping into fund balance by more.

Um, and then I'll I'll hang tight until the budget's released in about a month with more detail on rural actually plan on that.

Okay, awesome.

And if you guys wouldn't mind when we, when you're doing your initial kind of presentation um during budget hearings where you do the big kickoff, could you please um put in a slide for us that talks about what the long-term strategy to refill fund balance to 15% is because based on these numbers, that is gonna be 2028 or maybe even 2029 by the time we get up there to the 15% that our fiscal rules require.

So I just want to know kind of what the long-term strategy is with regards to fund balance as well as what we're looking at in kind of the short term.

Thanks.

Uh, that's just a really important point.

I just want to uh settle on it for a moment because you named two things in both of your comments.

One is we have to really be mindful of trying to stay above this 10% hard deck.

We don't want to dip further into fund balance.

That's our first goal.

And to try to both solve the crisis we're in now and refill that in this year would mean cutting another 100 million dollars to put 100 million back in fund balance to restore that.

Uh that would be even deeper impact on the city.

And so you're right, we have to attend to the long-term plan to restore it.

The first goal this year is to stop the bleeding and make sure we're not dipping into that fund balance anymore and then focus on refilling.

Uh, we looked at some options of do we try to put 10 or 20 or 30 million more back into fund balance this year, but it just meant adding 10 or 20 or 30 million dollars more to cuts.

Um, and we think the better path is to put us on stable ground, work on a path for growth and recovery, and then really prioritize with your partnership the plan to restore that fund balance.

So that's going to be a really important part of the story.

We'll have to stay focused on after we get past the initial budget conversation.

I appreciate you raising that.

Yeah.

Councilman Walter, very quickly.

Um, we started in April at 11.2%.

And we've had many shocks.

And I I'm I'm agreeing with where what councilwoman Sawyer stated.

It would be very helpful to have more clarity on that movement.

If that movement was from 11.2 down to now 11.

From the your predictions and forecasts, my assumptions is that that should those shocks have brought us faster, closer to 10.

And that 10 is an important thing as we as council begin doing our budget.

So I would love some more precision because I'm feeling a little uncomfortable with us when we had the original forecast in April was 11.2% of reserves.

That was the number communicated.

And for us to still just be at 11 with the shocks that we have demonstrated and the updates on forecasts, seems maybe a little squishy.

So I trust y'all implicitly, if someone could be really clear, because as we saw talk about amendments, we start talking about all of that will impact not just fund balance but reserves.

And I think it's important before our process begins for us to know are we at 10 or are we even under 10 at this point?

So we'd love to have some clarity.

Not today, but just offer is in the budget book, we will come out with so right now.

Um the budget, the proposed budget for 2026 uh is not finalized.

We are we are building it.

We've got about a month to go until the charter deadline of September 15th.

And so in that 2026 budget, you will see for 2025 a revised fund balance forecast, which will be kind of the most official one uh once we lock in some of those projections.

But I've got a sign of trust.

Um every month we're in slightly different numbers, um, and then still have a chance to on the expenditure side uh pull those down to preserve as much capacity as we can to stay at a slightly higher fund balance.

Very helpful.

Thank you.

Councilman Redres.

Thank you.

Um, I know we've focused a lot on the sales tax revenue, but I would like to see a breakdown of the other revenue sources that go into our general fund and those projections and what they were last year as well.

So um so in the budget book, which will be released here in about a month, we will have uh a huge amount of detail, and certainly some of the budget hearings uh can spotlight some of those different revenue sources.

Uh, there are over 300, so so some of them are very, very uh de minimous, but they're all very important.

Um, and there's lots of different stories in every one of those revenue sources.

And so with the budget book, you will absolutely have that um with super grand layer.

I have a question.

So the budget hearings feel so overwhelming, right?

There are we so if you want to could they reach out to you prior to get instead of because we spend so much time on the general fund, which is like the 70 percent.

I think what councilman Albiders is saying she wants to look at the 30 percent.

Maybe it would be nice if we Angela, we used our one-on-one times like the to look at that data briefing so that we're not trying to fit everything into one week because that for me, it oftentimes feels overload by the time Thursday comes around.

I'm like, whoa, I can't even process anymore.

So if we could figure out how to create chunks of information, that's what I wanted to do when I mentioned this opportunity with the mayor to use mayor council.

So he was hearing directly back from all of you instead of having to go through committee.

That's why I asked, can we use a mayor council forum?

So you all could hear it, and how do I support you all, knowing we have one month before you get the budget book?

Use this time this is total strategy.

How do I get you the chunks of information to breast preputies released on the 15th?

Does that make sense?

Yeah, that would be very helpful if we can get um a more detailed breakdown of that.

Uh, just so everyone knows, and it's in the presentation.

There are already um we're planning on uh council one on ones the week of September 8th.

Right to go over specific questions.

So that's already for Finbiz.

I'll just um add to that.

I believe I've spoken to, I think Angela about this is looking at um what can be brought to the committee in preparation, like we've done in the past.

Um, in preparation ahead of um the budget here.

Yeah, that's helpful.

And then just one more part to that question is I'm curious what the costs of the affordable housing pilot program with a sales tax or tax holiday is as well.

That'd be helpful.

Thank you.

I don't have that for you, Councilmember.

Right now, but we will get that for you.

Thank you.

Thank you.

Thanks, Justin.

Back to you.

Um, if we go to the next slide, uh just a few more from me, and then I'll turn it over to Heather, who also has a lot of content, make sure you all have a chance to engage with.

Um, so this is something that we've seen coming, and we've taken proactive steps to address.

Uh we have since 2023 had a position review committee that is looking at just about every vacancy in the city before we post for that again.

The mayor back in May announced that we were on a hiring freeze, uh, which has generated savings.

We have reduced spending on discretionary items, reduced spending on services and supplies.

Our peak team is working with agencies on innovations and smaller opportunities for savings and how agencies operate and serve residents.

And then as a reminder, for the 2025 budget, we actually did reduce expenditures relative to 2024.

Another thing that's not listed on the slide, but that I will note is in the past few years we've we've dipped into our fund balance.

And so that has drawn down the amount that was in there in hopes that we would see this resurgence and economic growth.

Um, with that not materializing, we're at this point where we're having to take some really difficult decisions, uh, both in cutting programs and going to layoffs.

Um if we jump to the next slide, want to start that conversation about the personnel updates and employee supports by first talking about what's included in the severance package, how we arrived at those amounts.

And so on the next slide, uh this is a look at uh by those different experience bands of what the amount of severance would be for each employee.

A few things that it's really important to note is employees will get 30 days of paid administrative leave, and then on top of that, we'll get between two and eight weeks of severance in a lump sum within a couple of weeks of being separated from the city.

During that uh 30 days of administrative leave, they will have full access to benefits and and really are thinking in calibrating these severance amounts was to utilize the the full amount of remaining budget this year uh to to help employees who are laid off, um, which which also then takes into account the separation payouts that uh many of those employees will receive for their accrued sick or vacation or paid time off, as well as the unemployment insurance that the city may uh be paying out later this year into next year.

So the actual amounts are going to be specific to each individual employee.

So what we were able to do was look at these different experience bans to calculate average salaries, average accrual balances, and then maximize the amount that that could be paid out in terms of severance.

On the next slide, uh we all also included in that calculation uh providing a stipend to employees so that they would have health insurance uh through the end of October, and then in addition to that, uh, from the date of their notification, they would have 120 days of access to the city's employee assistance program.

So that's just some of the numbers behind those severance amounts and what's included.

Uh with that, I will turn it over to Heather to speak more about the process.

Sure.

Um, if you want to go to the next slide.

So once a layoff has been determined within an agency, OHR is then involved.

So OHR has tools to support first the leader in preparing for their layoffs.

Um so that is tools and trainings, and then we also partner with city departments to ensure that they comply with career service rule 14.

And then, of course, we have been working hard to provide employees with a lot of communication and resources if they are transitioning from the city.

And um, I do have a layoff separation guide I will hand out in a minute.

Um so the leader, if you want to go to the next slide.

The we spend a lot of time with the leader because once that layoff has been determined, oftentimes the leader doesn't even know who that will impact.

They just know that it will impact maybe a certain classification.

So to help that leader um determine the final layoff.

They OHR has designed um numerous tools.

So the first is an employee rating template.

And in that rating template, we provide definitions for skills and abilities and help the manager rate skills and abilities within our five-step rating process.

So exceptional down to unsuccessful.

After they understand that, we have then a uh evaluation facilitator guide, really, and that is for the um HRBP to help guide the agency through the process to evaluate their employees and of course to comply with career service 14.

Yeah, question.

Uh a couple questions, Councilman Cashman first, the councilman's also chairs.

Sure.

Wondering on how you're calculating length of service specifically.

Heard that council aids that moved from council to positions, other positions with city agencies, were only being counted for their agency time.

Is that fact fiction?

I I have not heard that, so we'll have to get back to you on that.

Thank you.

I appreciate that if you would.

So to answer though, your question, it employees are rated on four categories skills, abilities, performance, and years of service.

Years of service is set at 25%, skills, abilities, and performance.

We wanted to spend time on skills and abilities of leaders so they would understand.

That's one of the questions.

Yeah, um, so has there been any um uh projections of anticipated costs of the settlements that will need to be paid out based on a lawsuits that may be brought forward by employees based on this criteria?

As I heard the city attorneys talk about that during the hearing CSA rule change.

If the that's probably my answer, councilman, as you know, we don't pre-project things like those settlements.

We do, of course, have a liabilities and claims fund that we actually do contribute to every year, and so we would rely on our existing processes.

We have oftentimes asked for your support to go to contingency if that that particular fund is exhausted, so we are anticipating following that exact same process.

How does that fund get filled?

Federal fund does a transfer that comes from general fund okay, and then um I had heard since we are talking about HR right now, um, that there or I saw a recent um proposed rule change when it comes to family leave, and I was curious how that interplays with this and the driver to try to save money.

So there is going to be a change to rule 10, which is paid leave.

Most of the changes are administrative changes.

There are a few changes to the care bank, and care bank in particular is the leave that um step back.

Care bank is paid leave if the employee qualifies for family medical leave under the state's or under the federal government.

Um there will be some slight modifications.

One is that currently employees can access care bank at the end of probation.

The problem is is that employees have various probation links.

So we have some employees getting it at six months, some at nine, some at 12.

So what we've decided is just to align it with FMLA.

So employees will then have access to the care bank at 12 months, which is when they qualify for FMLA.

So it creates parity there.

Um, the other change that we're making is that um there has been some confusion about how care bank applies to overtime.

So care bank will no longer count towards overtime in a pay week.

Um, so employees will get paid straight time for care bank, and if they have any other time off, it will be straight time until after care.

And there's also been some changes to definitions of who who you can take leave.

Um reasons that you can take leave for what types of family members is correct.

Yes, so we are also aligning care bank with FMLA.

So the reasons you can take care bank are for yourself, your family, your spouse, and your children, um, and then um FCA, the Fed the state law that models FMLA allows you to also take time off for an expanded group of individuals, including uh domestic partner and um a few other relationships, but we are eliminating the ability for employees to take time off for say a grandparent or a grandchild.

And also in-laws and in-laws, correct.

And it says child in law, which I'm not sure what that is, if that's like a needs or nephew.

So to be clear, that is a different part of the rule.

Um, all we're doing there is that we're clarifying that employees who would like to take time off who who qualify for um bereavement leave can take time off for an expanded group of individuals.

And we said child in law before, and and we're clarifying it now as so we're just I guess not clarifying it.

We're adding child in law as a reason you can take bereavement leave.

Thank you.

Yes.

Councilman Alvidres.

Thank you.

Um I think it would be important.

I would like to see the demographic information of the people that would be affected by that change.

I am concerned about that.

And then I also wanted to know what tool, the name of the tool that we're using to calculate who will be laid off.

Okay.

So the um first your first request was for care bank, and you would like not related.

Yes.

So we do have a ranking tool, it's the name of our tool.

Once an agency called ranking tool.

Yes.

Um once an agency determines which classifications will be laid off, and then they have determined the weights they want for those four categories.

So skills, abilities, performance, and years of service.

They then report that to OHR.

OHR then gives them a ranking tool with the pre-built ratings, along with anybody in their department who is in that classification.

And then the leader then uses that with an HRBP to decide based on the lowest score, who in that classification will be laid off.

And we don't we haven't run everything through that toll yet, or do you all know?

We have run most agencies, yes.

Okay, so you kind of pretty much know who's getting laid off at this point.

We generally do, yes.

And when you said years of service has to be 25, I'm confused by that.

So within career service rule 14, when we changed the layoff rule, one of the changes that we made was that there would be four factors considered, um, but years of service had to remain at 25%.

So we couldn't uh minimize someone's years of service beyond 25%.

Thank you.

Thank you.

Go ahead, back to you.

Sure.

So if we move on to the next um slide.

Sorry, Councilman Flynn.

Um, I don't know if you have uh the ability right now to answer this, but uh the city navigated some pretty rough waters very similar in the Great Recession, and Mayor Hickenlooper did a pretty good round of layoffs as well.

Um the chart that we saw showed the COVID impact, but I'm wondering if is there any data that you can use for us at some point afterward that shows the Great Recession impact, the housing crash, and how many city employees did we lay off then?

Uh so that we can take a look and have some kind of window to understand because I'm I was busy getting laid off at the Great Recession as well, so I didn't pay a whole lot of attention to city what was happening with with Mare Hickenlooper, but I'm wondering if this is going to be worse than that.

Is it not gonna be as bad as that?

Because that was pretty bad.

This is gonna be worse than that.

I'm all in the can I qualify that because we did a lot of incentives to retire, if that could be added um to that number.

Yeah, yeah.

There were two incentives since we did look at that, and Stephanie others can weigh in.

Um it turns out to be actually not cost effective for the city.

It is more expensive to incentivize someone to retire than to have them.

You won't be surprised just asking for the numbers, yeah, just so it encompasses all staff loss, I guess.

Helpful, sorry, yeah from the from the great recession data.

Yeah, helpful consultories, thank you.

Um so we've talked about OHR and how we're assisting the leaders.

Uh, what's also important is that OHR wants to assist employees as they transition out of the city.

So Teresa is handing out our um layoff separation guide, and this layoff separation guide obviously has details about everything that we think the employee may ask about from health insurance to payouts to um uh employee resources, mental health resources.

So um please read through that.

Um, this has already been posted online.

Employees who have access to this already, but they will be getting it when they uh separate from the city.

In addition, we also have some outplacement services that we're providing employees.

The first is also obviously personalized career support from the Denver Workforce Center, and employees can get engage with them as soon as they'd like.

And then we are also offering employees a six-month linked in premier membership to help them find a job.

So those are some of the outflows and placement services in addition to the layoff guide.

And I think I'm sending it back to you.

And this there's any questions.

Because I know we're gonna get into dates and whatnot.

Um so a couple of like I guess procedural questions is how are positions that are not funded by general funds being um impacted.

So we know there's a number of employees that are funded by ARPA dollars or um funded by other um funding streams that are not general funds.

Um, will they be impacted because they have been impacted as it relates to furloughs?

So my concern, as you can see, is that they will then be impacted by layoffs.

So there are a number of employees, city employees who are being furloughed, who they're um not being paid by general fund, and that money will not come back to us, but they're still being furloughed, so they're still having to not work, even though they're not receiving any money from general fund, um, they're getting it from other sources.

So I'm curious if there will be a similar impact when it comes to layoffs for those same types of employees.

Layoff units is that.

Right.

So the only the only time I can think that there would be an impact is if a layoff unit crossed funding sources, and you had some employee, some employees that were in a certain classification that were in general fund and maybe a non-gener, there they still have the same layoff unit.

So what may happen is you may have a non-gener employee in a classification.

Um they're still in the same layoff unit as their peers, they may be laid off, but someone from the fund may take their place.

So that is possible.

Okay, so then even if employees are funded through another source, they are still at risk of uh being laid off.

They share a classification and their department has identified that classification and that layoff unit for layoffs, it is possible.

Okay.

And the last thing I'll just ask on this is I kind of alluded to, and because it is related because the furloughs are in place to address a shortfall.

Um, why is it that city employees that are not being paid by general funds are still doing furloughs, even though that money is not coming back to us, and in there are cases where there are state funded um positions because of the type of programming that they do where the city is simply the fiscal agent for that program, which means that that money has to be rebudgeted in some way, or it goes back to the state, which then means that that program is at risk of not getting funded that they the funding that they need the following year because they're gonna think we don't need it.

So I'm curious why we're still continuing the same with Den, same with all of those, because if we are truly trying to figure out how to best save money and address the shortfall, why are we forcing employees to take furloughs if it's not coming to the general fund?

I still don't understand that.

Um there are multiple scenarios.

We have no scenario wherever we're sending any dollars back to the state on any program based on furloughs.

There's no connection between that for us at this point.

There will be in this case.

I don't believe there will be.

But so we we can talk, we have no indication from either of our heads of budget that that's happened, so I'm not sure what your data source is, but happy to look at it, whatever you have.

Um we have no record of that happening.

Uh, the second one is well, we let's take, for example, Department of Human Services.

That is not a general funded organization.

That is correct.

Uh that organization is facing even more revenue impact from federal cuts and state cuts that are gonna require additional programmatic challenges.

So the dollars that they save for furloughs will stay at Department of Human Services and can be used to help shore up other parts of the budget where they will face even larger federal or state cuts.

So that is actually a net benefit to them to be able to survive what could be even rockier times that some of the directly general funded positions don't face.

Um there are all departments that face the same economic risks uh that you saw in this slide around declining sales tax revenue.

That would include things like people buy more airline tickets, if in fact you see tariffs going up 20% because that one of the luxury goods people stop buying if prepared for that impact across every agency, including Denn.

And there are places where Denn uh uh where Denn has partnerships in the city where they cover or code.

Invest in things that are general funded, and so those are often in partnership, and so there are ways every agency is helping, whether it is through general fund dollars or their own.

And I think we see every dollar as a city dollar in this case when you have an employee who's funded 12% by a state fund and 30% by a federal grant and 52% by general fund.

Uh, we are not gonna subdivide that employee three ways.

They are a city employee that provides city services with the city team.

And I think it's easier to have all folks treated equally in that scenario.

That's why we did it that way.

And that's why those dollars will be used to help shore up shortcomings we may have in multiple departments.

I have a question on that.

Um what I hear you saying, and this is for you, Stephanie.

If we get funds in from the state, goes into a fund org, people get furloughed.

Do we give that is there any connection with those with that funding source, right?

That we have to give that money back to the state, or once we get it into that fund org, is it ours, and then we get a capture the furlough, the furlough amount, reallocate it to other things so that to councilwoman Gonzalez Cutier's point next year when they're building out the state budget, we don't look like we're not spending needed money because they're much needed.

I'll I'll address that question and and and I guess revise what I had said.

So a lot of these are on reimbursement, just like what we do when we grant funds out to organizations.

So it's the same um idea with the state, it's usually on a reimbursement.

There's a budget that's created by the agency that is overseen by a board that is required by state law in this particular case.

And so we draw those dollars down by our reimbursement.

So what that means is that if they are not drawing those dollars down for the payment of those um staff members that are taking furloughs because they will not be they they the state will keep it, and then what the state will see is that he did not utilize the full allocation that we were granted, and they will then make a determination that then Denver, the second judicial district does not need those funds to provide an essential service that is also state mandated that is being provided for youth.

I think we can answer that question.

Do you want to just step in, Stephanie?

I think it does depend on the grant.

So I know my very specific grant.

I guess I would say two things.

First is um we have historically supported those grants, like we don't typically charge our finance people or our OHR people who also support those grants, and those folks are funded by general fund oftentimes and not being reimbursed by the state grants because we don't typically do a lot of admin charging.

So uh so on the one hand, I think that it alleviates the pressure on those folks and where we can pivot those dollars, we will oftentimes uh for better or for worse with grants, um, do have some money because we don't maybe have maybe the positions are not filled the full the whole time.

We oftentimes have work with global to see if we can extend those dollars, extend those grants.

I'm sure it is very um grant specific, very situational specific, and so we will work with every agency to figure out if there are other opportunities for us to be able to maximize those dollars or carry those over, and we'll you'll look at the exact and you're talking about a very specific one, so we can certainly have that conversation to take it.

It's not a grant, it's just it's an allocation based on a state mandate.

Yeah, we'll take a look at it and see what our options are.

Happy to talk more to be clear.

We have no indication nor history nor any plan for any investment in which we would have furloughs materially affect the drawdown of a state grant that would reduce the future amount of that state grant.

So that that has not ever happened that we're aware of, and we have no plan for it to happen.

We're in very close contact with the state about much bigger fears we have about reasons they will make changes which are linked to federal deficits and state deficits, the driving cost in those situations, none of those is around whether or not a furlough would affect the total size of a grant.

Yes, Councilman Flynn, and then Torres, and then we'll go down the room.

Thank you.

Um Heather, I want to make sure I understand uh the uh weighting system.

And I think I heard you say that with the four categories that each agency was given the option to weight them.

So we could have general services apply different weighting to one category versus another, over say parks and rec or Dotti, or you name it.

That offhand, that didn't sound fair to me to the city workforce.

But maybe I'm missing something.

Is it based first of all?

Was the 25% for years of service to be consistent across the board?

Is that that that's correct?

It is consistent.

So that doesn't change, they can't value that at 10 or anything else.

Okay.

What is the reason?

Is it rooted in the mission, the core mission of each agency being different?

What's the justification for allowing different departments to weight their employees differently than another department?

Some agencies may value skills more than past performance.

Some agencies may uh value past performance more than skills and abilities.

Is that is that based on their core mission, or is that based on the decision of the department head and the top staff?

Which seems a little more arbitrary than it is rigorous and based on on the mission of the agency.

I think it's linked to the mission of the agency and the core services either that agency uh provides or the employees within that unit uh provide.

And I think the idea is that those roles may differ and the expectations may differ.

Um you may have an agency for which, if you're host and you've been around for two years, a history of past performance is less relevant because you don't have the same performance history you would have with someone that's been at in a DOTI division that's existed for a hundred years.

And so I think there's it's based on the mission of the of the organization and the roles in that department.

Do you evaluate that for to make sure that it's modified fairly?

Yeah, so the so the process is is that have you disagreed with any department head who said here's what I'm out the weighting that I'm going to use?

Have you looked at that and said, I don't know.

And Mayor, if you want to wait on that also.

So the process has been that the department picks the weight before we send them the layoff tool.

So once they pick the weight, we then send the layoff tool.

So they're unable to back into a weight that they want.

We require them to send us the weight before they give us the weight, uh, the layoff, we give them the layoff tool.

So that's one preventative measure from sort of making it arbitrary, um, or trying to get a certain person maybe a certain within a certain classification.

So that happens once we then get the layoff tool completed back from the agency.

Uh our executive director, Kathy Nesbitt has reviewed each of them, and she did not find anything that she has found concerning.

Oh, and the city attorney, thank you, also um reviewed them.

Okay, did you go all the way up the chain?

Does it include supervisory management, upper management?

So what which in the review reviewed for retention or layout?

Yes, awaiting.

Okay.

Every employee would the department would be in that category.

Council Torres.

Thank you.

Um Councilwoman Gonzalez Cut Yet is mentioned ARPA.

Um we've got an end date to utilizing ARPA.

Can uh you provide just a quick narrative of how many staff are currently funded by that late uh uh I shouldn't know the top of my head, but it's it's less than 10 at this point.

Yeah, okay.

Five or six, yeah.

Yeah.

And those are the folks that are still required to provide reporting.

So you may recall when we first received ARPA dollars, we did in fact backfill reductions, but every year you all approved a budget that slowly moved all of those folks over into the general fund to assure that we didn't have this clip at least for that one.

Our funding through the end of 2026 because reporting will actually quite frankly right be required through 2027.

Okay.

And is that the only um like federal infusion that we had that had an end date to it?

Like, do we did we have staff through COVID relief dollars or we wrapped up all the code that's relief dollars, yes?

Um well, of course, every grant has an end state, but but in terms of those big giant ones, that would definitely those would be the big ones.

Okay.

Um, we have a sense whether it's during budget hearings or maybe during our one-on-ones of contract inflations.

So um where we've already approved a contract that goes up.

We've kind of talked a little bit about that, but I have no idea what that scale of increase will look like.

Um yeah, we can think a little bit about those.

I mean, we that has been, I will say lots of executive directors have really been thinking through those in particular, right, and trying to understand how those impact their ability to serve, and then also versus people, and so um it's a good question, councilman.

I would say most people would say, well, we we may have a multi-year contract, but we always have a you know a clause that we can revisit.

But um it's a good it is the thing that we watch every agenda to take a look at those multi-year contracts.

So you're right to be sensitive to those, and we'll continue to match those.

Okay.

Um and then finally, I just want to um thank all four of you, five of you, Lisa.

Um you've been around long enough to have experienced a lot of ups and downs in the city, and it's these are your peers that we're talking about as well, and it's never easy being the one to analyze and create a system um by which um we lose a lot of our staff.

So I just want to thank you guys.

Thank you, Council Torres.

Uh, President Pro Tim.

Thank you.

Um I had a question just for process.

Um, you had mentioned the four ranked um categories, skills, ability, performance, and years of service.

Is it the department head or the departments that are determining like critical position need?

Is that where we get the you know, you had mentioned earlier, like our trash or you know, those those services that are that are critical to the operation of the city?

Who determines that?

So that hopefully happened before any layoff process occurred.

So OHR is only involved at the point where the layoff has occurred, or a decision has been made, and I would assume then the agency ahead of time would then have determined the critical positions and not laid them off.

Okay.

Thank you.

Yes, that's correct.

Okay.

We we sat with cabinet heads to look at what are the most core services in your agency, which are the ones that have to have, which are the ones that are more flexible.

And then it's thank you.

Um, and then it's the tool that is doing the analysis of or will it tell us, you know, um at what level within departments?

I'm not using probably the right terminology, but what positions within departments would be um looked at to be removed.

So actually that happens before the tool.

So the tool agencies could receive multiple tools.

So if they have identified, say three classifications that they'd like to have a layoff in, people then give them three ranking tools, one for each classification.

So they ahead of time have determined which classifications they will see a reduction in, and then the layoff tool will be used to decide who in that classification will be laid off.

Okay.

Does that get us to like uh I think that answers what I'm asking is I'm just looking at like within a within a specific area that we're not weighted too heavily in as to who gets laid off, like it's all frontline and no directors?

Like, is it pretty well balanced across?

How do we know that?

How are we making that something that we're looking at?

Um depends what the city attorney's office is also looking at.

Okay.

Um, and then my last question um uh around that is we're talking about people, real people, the determination of you know, where they are in the tool.

Um, how does is that balanced with like vacancies?

So if there are reductions that are needed to be made, and maybe proposed vacancies versus people?

Correct.

And in any in every situation where we've had a chance, we're always prioritizing vacancies over a filled position.

The goal is always to start by removing a vacancy before removing a field position.

Okay.

That was part of OHR's process with the leader is to first eliminate vacant positions and then second uh terminate any probationary employees unless they asked for an exception for those probationary employees.

And then remind me again, what is our estimated savings from the reductions that we're looking at?

That I don't know.

You mean for the city for all reductions?

The target, well, the the gap that Justin walked us through was the 200 million dollars is the gap is the gap between what we were projected to spend 26 and what our actual revenue will be.

But we're not expecting all of the 200 million to be covered by vacancies.

What percentage would that be?

We won't know if we have an estimated.

That's what we're working through as we speak.

Okay, so DBD.

That is what will be at the budget.

That is what the budget book is.

Yeah, because that is in every department across all line items across every potential uh allocation that they're spending, where can they look for savings?

Okay.

Um, and then I know that we have um I'm good.

I'm gonna take back that question.

I just answered it in my head.

Thank you.

I don't have any other questions.

That's what I'll be dressedly laws.

Thank you.

Um the so you said you know about who is going to be laid off.

What percentage of our staff are you estimating at this time?

We won't have any of those numbers until you until we talk to every single department and individuals.

We won't release that data until we talk to staff.

Okay.

Um and so what you're saying is that the heads of the department chose certain classifications to get laid off and certain classifications not to?

Is that correct?

Each agency decided their own um budget reductions.

Okay.

Um, and who is measuring is it are we measuring what skills are most important, or are we measuring the person's individual skills?

So it is the measurement of the employees' skills and are related to their job.

And they were based on the five rating factors, correct?

Okay, and then how is their ability measured?

Same way.

So skills and ability were rated the same based on the ability needed for the job and the skills needed for the job within the five rating factors.

Exceptional down to unsuccessful.

Okay.

And obviously, this is a concern for me.

And I would assume my colleagues is what is there going to be an expectation on further on our office or other independent agencies.

I've heard that the DA's office has done some layoffs.

Are there other agencies like the auditor, like the clerk and city council that are going to have expectations around this?

We have communicated to independent agencies' expectations of budget balancing for 2026.

Yes.

And we have received that because I haven't seen that.

We are discussing it next Wednesday.

Budget working group met yesterday morning, and it's what we're bringing to the entire body and operations on Wednesday.

Okay.

Thank you.

Yeah.

Councilman Watson.

Um quick um comment and question on top of that comment.

Um my prior life, I I had a different work experience, and I worked in a pretty large company for 23 years, worked in the front, middle, and back office.

We use a similar rating system.

We use a similar um scaling and waiting process.

What we had maybe and here comes the question was that we had kind of a um a skills assessment tool that at the beginning of every um uh year and review, folks knew what our four targets were, what the weighting was, and kind of what the skills assessment.

So folks knew on a regular basis how they were being rated and a monthly one-on-ones or quarterly check-ins or six month review.

I know that it's uh the rule of 14 changed recently.

I'm curious, was there a mechanism in place um once that went in where employees had some level of seasoning on?

This is not only the um the four um weighting process, but this is the scale, the five rating scale that we're rating your performance on.

And this is where you are kind of um demonstrating based on the core scorecard dashboard for this team.

Is it has was there enough time for any of that level of um specifics created for management, employee management, performance management in place?

There wasn't time to put in a rating scale, but the jobs job descriptions for each employee does list their skills and ability.

So those are are clear prior to this process, and it just simply overlaid this current process.

Yes.

And there is obviously a complete employee evaluation framework that's already been in place every year that's existing.

This was only a modification to the uh the weight, the uses for layoff decisions and didn't change any part of the evaluation process for employees.

Okay.

One other question on the offboarding of employees, always a difficult process.

Um, I didn't see listed in the um uh opportunities for um employees uh like a job fair or anything like that.

No, it's time intensive.

It's something that the folks that I used to work for, we would do if we had cycles.

We would have a job fare and invite folks in and say, hey, you could sit and speak to um uh interested um um uh companies.

Is that something I know it's time intensive, maybe a little bit much for us to take on, but curious as to the thinking if that was a plausible a possibility for some kind of job fare at the post building or wherever so from an agency perspective, no, we are not hosting a job fair.

However, employees should engage and we are encouraging them to engage with the Denver Workforce Center.

Okay, and so part of what they should be encouraged to do is attend maybe other job fairs and help them upskill uh with their resume and things like that.

So that they will be directed.

So yes, two things just to uh expand on that.

One is our our economic development office is focused entirely on providing that job training placement support outplacement services to any affected employees, or thanks to our economic development team will be stepping in to do that for everyone that has need.

The other thing that we're doing is where there are, you know, because we've had a hiring freeze, we have a lot of positions in the city that have been held for which we're currently understaffed.

Um when departments uh finalize their budgets, uh, we should be prepared for there are places where we are doing less and we are reducing the size of teams.

There are places where they've been holding positions uh that they will need to at some point start hiring.

Um when and if that happens, we will then prioritize making sure if there are city employees who are displaced uh from certain uh agencies, if there are other agencies that have openings for which they're qualified, will help encourage them and connect them to apply for those uh positions if they exist in the city.

Um then, of course, the extent to which we have other city resources, whether to job fares or others, that's would be part of the equation too.

Um but as you know, a hiring freeze does not discriminate, it sort of stopped all hiring, and so there are places of core purpose that are top priorities for an agency or for the city that we will that people are budgeting to bring folks back, and that was part of the balancing they had to do in places where they made hard decisions.

Last, sorry, I apologize.

That's in there.

The last thing there was discussion of EAP support for associates, and I know as a former people manager for um those were some of the worst experiences of my uh tenure at my former company.

Uh EAP was always available for us.

And I'm curious as far as the decision makers, the leaders of these departments, are we also providing and clearly directing EAP support for them?

Absolutely, yes.

So that is in their their checklist.

Uh upon layoff, yes, they are encouraged to um encourage the separating employee to use those resources.

There are actually two.

There's our on-site counselors that uh they will still employees will still have access to, and they will also have access to our employee assistance program uh so they could call and get an appointment with the counselor.

Um, in addition to not so much the employees also, I know that's available for them.

I'm saying the the people, the manager of people that's part of it.

In addition, the leader is expected to use that, and then we're also setting up classes and sessions ahead of time because we believe that the employees who are left behind will also be impacted.

So we want to support them as well.

Thank you so much, and as uh councilmember Torres said, I know this is uh some of the uh the uh toughest decisions that are being made, and you all gonna take some of this stuff home with you and just know that we understand this, and um, we look forward as council to find ways to support you and the teams as you're going through this process as well as the employees that will be um directly impacted by this.

Thank you, Mr.

Mayor.

Thank you.

Thank you.

I think I have Councilman Gonzalez Cochez, then Councilman Cashman.

Oh, okay.

Um, what one quick question is can we get a copy of the ranking tool that's being used?

Yes, absolutely.

And then um the last things that I don't expect a response right now, but I just I guess want to put out there as we head into um all of the budget hearings.

Um, what I think has still been left um very muddy and and unclear is what process has been utilized to evaluate all of the city contracts and projects that we have going on.

Um, what looking at what is the nice to have when it comes to contracts, and then on top of that, you know, think looking at things that we are spending money on, and to your point, Mayor, of you know, well, Den may need to keep some of that money to address other things because people are buying less plane tickets and this, that, and the other.

I think the same is safe to say when it comes to projects like 16th Street Mall, when it comes to things that we are spending money on in hopes that it will be bringing money back in when we just heard from from you from the staff that people aren't going to be spending money.

So we're pumping money into something that we're hoping we're gonna get a return on.

And so I'm just really worried that about that fact.

And so just thinking about that as we go into um budget hearings and and what is some clarity on the contracts that are in place now.

Are we re-evaluating those?

Are we looking at what are the nice to have's?

What are the needs?

And so I don't expect a response, but I just hope that that that is something that can be presented to us because it feels like it has been a black hole.

Uh we'll look forward to that conversation.

I think that's exactly what we'll do in the budget, and I'd say we'd spend hundreds of hours on exactly your question of what are all the nice to have's that aren't have to have, and the first conversation that is always contracts, services, programs that are not people, and so I think that is always going to be the priority, and I think you'll see that in the budget when it comes out.

Um then Sawyer.

Yeah, just to correct one just to be clear, I'm assuming anybody laid off qualifies for unemployment automatically.

That's correct.

That's all the story.

Thanks.

Um I just had a question about so this actually happened three weeks ago that I voted no on a contract for a Dottie contract um that had been re uh that had been extended, right?

The initial three years had finished, and then the contract was extended instead of being put back out to bid, right?

They were super helpful in providing me information on that at the end of the day.

Um they should have put that out to bid to save to see if we could have saved more money, which is why I voted no on it.

Um but it got me thinking that I think Councilwoman Gonzalez Gutierrez's question is is the right one.

What we have not had is the ability to have a conversation with the agencies in your administration about what policies you all have put in place for the city agencies around things like requiring things to go back out to RFP when it could when it would have just potentially been a standard extension of a contract.

Um we don't have that information, and what that is done is it makes it very difficult for us to sit back and approve contract extensions.

Well, makes it I'm gonna speak for myself.

It makes it very difficult for me to sit back and approve contract extensions when those contract extensions could translate into savings, and we are not hearing anything from the agencies on how they are translating into savings, and we're not hearing anything from the administration on what requirements you are putting on the agencies to ensure that they translate into savings.

So I don't that's a big ask.

It's not gonna be solved at this moment, it's also not going to be solved in the budget process.

So if there is an opportunity for us to have that conversation maybe at Mayor Council, a future mayor council, um, I think that that would be super helpful because I need to be able to understand what the what safeguards and requirements the administration has put in place around contracting, because we are required to approve those contracts over 500,000, and I need that information in order to be able to do that appropriate.

I appreciate that.

Uh I think that'd be helpful conversation.

I'd be I'd be happy to have that.

It'd be great.

I think we're looking for every single what I what I appreciate about your response here is you have the same obsession I have now, which is we have to look for every dollar every place all the time.

And any place where we can cut 15% out of a contract or 10% out of the contract, that's a huge material savings for us.

Uh and so we're doing that in all the places, how we put in place the policies that make clear here the structural ways in which every time there is a contract, we give a chance to make sure someone else that can come in lower does come in lower.

And what are the things we're doing to make sure we're not driving up the prices of those contracts?

Like those are totally fair questions.

I would welcome that conversation.

Yeah, that would be fantastic.

And I think um just for us to get our true understanding and be able to wrap our minds around because to get out of this, it's gonna be a hundred thousand dollars at a time.

Yeah, we'll see.

And that is a lot of work, it's a huge lift, but with an agency this or uh city this size, each of the agencies there has to be some sort of standard policy in place.

We just don't know what it is, right?

So a conversation about that would be great.

Helpful.

Um closing comment, uh, then I think we'll transition because I know we're out of time and you have committees.

Um, but I do want to um say uh first a thank you to the members of the finance and human resources team who've been here and for all your amazing work.

Uh the thing I would add um is uh as we go into this next stage of this process, I can feel a lot of emotions in this room, and there are a lot of emotions in the city as we handle this.

I will tell you I've spent this is a human business, and I've spent hundreds of hours with the heads of agencies who are trying to balance this budget every day, and for whom they are losing sleep and they are in tears, and this is not harder on anyone than it is on them who have the very single people who come to work for them every single day and give everything they have that they have to make hard decisions about.

And so uh I know we'll all have feelings about it, we'll all have concerns about it.

Ask you also to keep in mind the human beings who were asking to make these very hard decisions, how much they're carrying, how much of their own team they're gonna carry, um, and how much they're gonna try to rebuild these teams after these hard moments.

But I think as the leadership of the city, those leaders also are gonna need your support and partnership because uh I think this is a decision they never wanted to make, never signed up to make, never asked to make.

Uh, they have to make it, and that's the challenge of leadership.

Uh, but I would ask we give them some real um support and uh belief of best intent around their leadership into hard moments because this is gonna be significantly uh difficult for them and for their teams, and they also uh will need our help.

So I just want to name that as we head into what will be uh important week next week.

Thank you all so much.

We are adjourned.